By: Dawn Papple
Monsanto’s profits are slipping and the agriculture giant best known for its GMO Roundup Ready seeds announced Thursday that restructuring will occur, including layoffs. Monsanto missed its fourth quarter earnings and is offering share buybacks, according to Seeking Alpha. The revisions come after the company lost 19 cents per share when they were expected to break even in the fourth quarter.
Monsanto announced that it will cut about one-eighth of its workforce, according to Seeking Alpha, though according to U.S. News & World Report, and others, the percentage of workers who will lose their jobs with Monsanto is closer to 12 percent of the current workforce. The company is also expected to buy back nearly $3 billion in stock, which is nearly eight percent of outstanding shares, according to analysts. Monsanto’s stock has fallen nearly 26 percent this year.
All total, Monsanto plans to lay off 2,600 workers, according to U.S. News & World Report. The St. Louis-based ag giant hopes that the new plan will generate between $275 million and $300 million in yearly savings by the end of the fiscal year in 2017.
The last time Monsanto announced a major layoff was in June of 2009, when around 900 workers lost their jobs. This time, CEO Hugh Grant blames the unfortunate impact of foreign exchange rates and falling crop prices for the lower-than-expected earnings.
“Despite weakening global currencies and commodity prices we continue to view this as a time of opportunity,” Grant said.
Monsanto has been struggling, and demand for its GMO corn seeds is plummeting, according to reports. Farmers have shifted more and more acres to other crops after last year’s surplus left farmers frustrated. The company’s sales ended up worse than even Wall Street analysts had anticipated. Biotech GMO corn seeds fell five percent while the company’s chemical business, featuring Roundup weed killer, fell a staggering 12 percent.
Earlier this year, Monsanto had tried to buy up competitor Syngenta AG, but that plan was abandoned in August after Syngenta AG rejected the offer. It’s been a rough fiscal year for Monsanto between lawsuits from farmworkers claiming that its pesticides contributed to their cancers, to major public resistance, to public resistance to genetically modified organisms (GMOs), as noted in an earlier report about Monsanto’s finances.
Entire countries have banned GMOs, in fact.
Public response to Monsanto’s lost of earnings has been both aggressive and celebratory.
Still, among one of the worst hits of the year came from the World Health Organization’s International Agency for Research on Cancer (IARC). In a study, IARC’s documentation was so strongly worded that Monsanto’s vice president of global regulatory affairs, Philip Miller, told Reuters, “We question the quality of the assessment. The WHO has something to explain.” IARC stated that there is evidence that glyphosate, the chemical in Monsanto’s star herbicide, does cause cancer, contrary to industry studies.
“Glyphosate is a broad-spectrum herbicide, currently with the highest production volumes of all herbicides. It is used in more than 750 different products for agriculture, forestry, urban, and home applications. Its use has increased sharply with the development of genetically modified glyphosate-resistant crop varieties. Glyphosate has been detected in air during spraying, in water, and in food. There WAS limited evidence in humans for the carcinogenicity of glyphosate.
“Glyphosate has been detected in the blood and urine of agricultural workers, indicating absorption. Soil microbes degrade glyphosate to aminomethylphosphoric acid (AMPA). Blood AMPA detection after poisonings suggests intestinal microbial metabolism in humans. Glyphosate and glyphosate formulations induced DNA and chromosomal damage in mammals, and in human and animal cells in vitro. One study reported increases in blood markers of chromosomal damage (micronuclei) in residents of several communities after spraying of glyphosate formulations.”
The statement from the WHO’s IARC, published in the highly-respected medical journal, The Lancet Oncology, unraveled the perception of safety of both the herbicides and genetically modified foods in the mind of the populace, and could be Monsanto’s great undoing, some claim.
What do you think? Will Monsanto bounce back with the layoffs, restructuring and stock buy-backs, or has the ag giant actually been brought to its knees?
Originally Published: Inquisitir